What does it mean to write something off?
For business owners, “writing something off” means deducting an expense from your taxable income. This lowers the amount of income you are taxed on, ultimately reducing your tax liability. To be deductible, an expense must be ordinary (common in your industry) and necessary (helpful for running your business).
For example, if your business earns $100,000 in revenue but you have $30,000 in deductible expenses, you only pay taxes on $70,000 in taxable income. Understanding what can and cannot be written off helps you maximize deductions while staying compliant with tax laws.
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What Can be written off
5 Common Business Deductions
These are deductions that most business owners use regularly:
- Office Rent & Utilities – The cost of leasing office space, electricity, internet, and phone bills.
- Employee Wages & Benefits – Salaries, payroll taxes, and health insurance premiums for employees.
- Business Travel & Meals – Flights, hotels, and meals (50% deductible) when traveling for business.
- Marketing & Advertising – Website costs, digital ads, social media promotions, and printed materials.
- Business Equipment & Supplies – Computers, office furniture, software, and other necessary tools.
5 Uncommon Business Deductions
These are often overlooked but still eligible for deduction:
- Bad Debt Expense – Unpaid invoices from customers can sometimes be written off.
- Freelancer & Contractor Costs – Payments to independent contractors (1099 workers) are deductible.
- Educational Expenses – Training, courses, and business-related books for skill development.
- Depreciation on Assets – Instead of deducting a large purchase all at once, you may spread the deduction over time.
- Employee Gifts – Up to $25 per person per year in business-related gifts is deductible.
What Cannot be written off?
5 Common Non-Deductible Expenses
These are expenses business owners often mistake as deductible:
- Personal Expenses – Personal clothing, groceries, or home expenses unrelated to business.
- Commuting Costs – Driving to and from your regular workplace is not deductible.
- Entertainment Costs – Sports tickets, golf outings, and event tickets, even if business-related.
- Fines & Penalties – Parking tickets, IRS penalties, and legal fines cannot be deducted.
- Political Contributions – Donations to political campaigns or lobbying efforts.
5 Uncommon Non-Deductible Expenses
These may seem business-related but aren’t allowed as deductions:
- Lavish Business Travel – If deemed excessive or unrelated, extravagant trips may be denied as deductions.
- Life Insurance for Business Owners – Premiums for policies where the business owner is the beneficiary are not deductible.
- Hobby-Related Expenses – If your business is classified as a hobby (without profit motivation), deductions are limited.
- Non-Registered Charitable Donations – Only contributions to IRS-approved nonprofits qualify for deductions.
- Home Office Renovations for Aesthetic Purposes – Functional home office expenses are deductible, but purely decorative upgrades (e.g., luxury furniture) may not be.
Final Thoughts
Keeping track of eligible business deductions can significantly reduce your taxable income. However, it’s crucial to separate personal and business expenses, keep detailed records, and consult a tax professional to ensure compliance with IRS rules. Writing off the right expenses can save your business thousands of dollars annually while helping you stay audit-proof.
To learn more about tax savings or just business insights check out some of our other blog posts.
